Income Tax Appellate Tribunal - Delhi
Smt. Krishna Wanti Batra vs Assistant Commissioner Of Income Tax on 20 May, 2004
Equivalent citations: (2004)85TTJ(DELHI)550
ORDER
Vimal Gandhi, President
1. This appeal by the assessee for the asst. yr. 1986-87 is directed against order of the CIT(A), New Delhi, dt. 16th Feb., 2000.
2. The premises of the assessee were subjected to search under Section 132 of the IT Act in 1985. As per 'Panchnamas' marked as 'B-4', 'B-5' and 'B-l' prepared by the Departmental valuer, total jewellery found worked out to 2,846 gms. As per the assessee, part of jewellery belonging to her daughters-in-law, Smt. Sunita and Urmil Batra, was also included in the jewellery recorded in the 'Panchnamas'. The entire jewellery except for jewellery of value of Rs. 1,66,348 has been held to be explained. This way a sum of Rs. 1,66,348 has been added in the income of the assessee from undisclosed sources in the assessment year under appeal The assessment was confirmed on appeal by the learned CIT (A). It is seen that while confirming the assessment, the Revenue authorities have relied upon orders passed under Sections 132(5) and 132(1) of the IT Act.
3. I have heard both the parties. The assessee is wife of Shri Chaman Lal Batra, proprietor of M/s Bhagwan Das Chaman Lal. The premises of above concern were searched on 23rd July, 1985, at Delhi and Bombay. Jewellery of the following value was found at the time of search :
At Delhi Rs. 9,14,530
At Bombay Rs. 4,75,000
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Total Rs. 13,89,530
The assessee and her two daughters-in-law namely, Smt. Sunita Batra, w/o Shri Raj Kumar Batra; and Smt. Urmil Batra, w/o Shri Gulshan Kumar and her unmarried daughter Ms. Veena Batra were all found to be assessed to tax: Having regard to jewellery disclosed by the ladies in their returns, the Revenue authorities in the first instance, accepted as explained jewellery of value of Rs. 5,92,038. The balance jewellery having value of Rs. 7,97,475 was claimed to be disclosed by different members of the family under the Amnesty Scheme of Department as per the following details :
Smt. Sunita Batra Rs. 4,25,000
Smt. Urmil Batra Rs. 2,71,339
Miss Veena Batra Rs. 71,834
Miss Poonam Batra Rs. 29,302
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Total Rs. 7,97,475
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Out of the above jewellery, jewellery of value of Rs. 1,66,000 has been treated as unexplained.
4. Shri R.K. Khiwani, CA, during the course of hearing of appeal, submitted that addition made is totally unjustified as the assessee in her return of wealth for the asst. yr. 1984-85 filed on 16th Nov., 1984, i.e., much before the search, had disclosed jewellery having gross weight of 2,888.8 gms. which was more than total jewellery found in the search. However, instead of considering aforesaid latest return or valuation report, the AO wrongly considered valuation report for asst. yr. 1978-79 and thus did not give benefit of item disclosed which had slight variation in the description. The Revenue authorities should have given benefit of weight of jewellery disclosed while determining the jewellery possessed by the assessee and her family members. The learned counsel for the assesses further explained that the assessee had 2888.8 gms. gross and 2779.300 gms. net weight of jewellery as per her return. The jewellery found at the time of search was much less as per the following details :
Gross weight (in gms.) Net weight (in gms.)
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1483.000 1428.100
1238.800 1214.400
124.300 124.300
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2846.100 2766.800
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It was explained that above explanation was duly submitted before the AO but was not objectively considered by her. The AO went by order passed under Section 132(5) which is only a summary assessment. Detailed explanation filed on 18th Nov., 1985, was also not considered. He drew my attention to valuation report filed in the case of the assessee for asst. yr. 1984-85 as also detailed explanation available at pp. 104 to 113 of the. paper book. The learned Departmental Representative relied upon impugned orders of the Revenue authorities.
5. I have given careful thought to the rival submissions of the parties advanced before me. It is well known that order under Section 132(5) is to be passed within three months of the seizure to decide in a summary manner whether the seized assets are to be released or retained. Such an order has limited scope and in most of the cases, these are passed to retain the seized assets. Similar is the position of an order passed under Sections 132(11) and (12) of the IT Act. I am, therefore, of the view that Revenue authorities were not justified in sustaining addition in dispute solely on the basis of finding recorded in orders passed under Sections 132(5) and (12) of IT Act. The detailed explanations of the assessee are not shown to be objectively considered by the Revenue authorities. It is further not clear from record as to why benefit of jewellery disclosed by the assessee in asst. yr. 1984-85 in the return of wealth submitted before the date of search, was not allowed. Likewise limited benefit has been allowed to other family members and not as claimed . by them.
6. It is further clear from record that jewellery of value of Rs. 13,89,530 was found from the premises subjected to search. It has been admitted by the Revenue that above jewellery belonged not only to the assessee but to her daughters-in-law and her unmarried daughter. Jewellery of value of more than Rs. 12 lakhs has been accepted as explained. The addition in dispute has been made on account of slight variation in description of jewellery disclosed in the reports filed with the return and reports of the Departmental valuers prepared at the time of search. Here again Revenue authorities went back to report for asst. yr. 1978-79 without considering latest report for asst. yr. 1984-85, In my view assessees were entitled to benefit of weight of jewellery disclosed in the returns as it is well-known fact that Indian ladies keep changing design of jewellery from time to time. Having in mind detailed explanation rendered by the assessee (copies available at pp. 104 to 113 of the paper book) I am inclined to treat the entire jewellery found with assessee as fully explained. The addition made in the hands of the assessee for undisclosed income, is unjustified and is directed to be deleted.
7. In the result, the assessee's appeal is allowed.